A comprehensive look into the construction industry and its role in the local economy.

Monthly Archives: January 2011

Husqvarna Professional Products is recalling about 600 Poulan Pro residential generators because they can catch on fire. The recall affects the following models: PP4300, PP6600, PP6600E and PP7600E.

The units have carburetors that can fail and leak gas, posing a fire hazard. Husqvarna has received four reports of fuel leakage, but no injuries associated with the leaks.

The Chinese-made generators are black and yellow-gold with two handles and two wheels. Their outputs range from 4.4 to 7.6 kilowatts. The model number can be found on the front of the gas tank.

The defective units were sold last year from July to September for $600-$1,000 by Poulan Pro and Husqvarna authorized dealers nationwide.

Consumers should stop using the generators and contact Husqvarna to arrange a free repair. Husqvarna can be reached at (877) 257-6921 between 8 a.m. and 6 p.m. ET, Monday through Friday; or at www.husqvarna.us/december2010Alert.

An article in today’s DJC summarized the economic outlook elements of a recent survey of contractors by AGC of America. Another interesting aspect of the survey has to do with contractors’ current involvement with, and expectations for, Building Information Modeling (BIM), LEED projects, Integrated Project Deliver (IPD), and Public Private Partnerships (PPPs).

(For complete survey information, including state and national data, click here.)

Washington State contractors responded that, on average, about 15 percent of their work used BIM. Only about a third of respondents expected this percentage to grow in 2011; 64 percent expected no growth in their use of BIM.

Regarding LEED, Washington State contractors said 19 percent of their 2010 involved LEED registered projects. Again, the majority (57 percent) don’t expect an increase in 2011. However, 43 percent expect more work involving LEED projects; these responders expect an average 15 percent growth in their volume of LEED-registered work.

Most state contractors expect IPD to grow. While on average contractors were contracted to work on only 0.25 IPD projects in 2010, two-thirds expect this type of work to grow in 2011, by an average of 30 percent.

Similar numbers for PPPs: On average area contractors worked on 1.3 PPP projects, and 67 percent expect this to increase this year (by just a little bit, 8 percent).

How do Washington contractors compare to the rest of the country? In 2010 our contractors used BIM and worked on LEED projects more often than contractors in the rest of the country, but did less work involving IPD and PPPs.

BIM: 15 percent of Washington respondents used it in 2010; only 8 percent nationally did.

LEED: For Washington contractors, 19 percent of their work involved LEED; only 15 percent on a national basis.

IPD: Pretty even, as state contractors on average worked on 0.25 IPD projects, 0.26 nationally.

PPPs: Our state’s aversion to PPP projects really shows in this statistic. Washington State contractors said that on average they worked on 1.3 PPP projects, but nationally the average was much higher (5.2). And while solid majorities of contractors on both a state and national basis expect PPPs to grow this year, Washington contractors expect a little growth (8 percent) while nationally contractors expect significantly more (30 percent).

Eco-Story has recalled 12-volt LED lamps due to a potential fire hazard. The recall involves about 42,000 units sold from December 2007 through August 2010.

The lamps can overheat when used without a Class II transformer. The company has received two reports of overheating.

The Chinese-made lamps sold for between $19 and $45 and were installed in commercial locations, mostly restaurants.

Commercial locations should stop using the lamps and contact Eco-Story for a free replacement lamp that doesn’t require a Class II transformer. The company says it has contacted all known commercial locations that bought the lamps.

To identify the lamps, look at the base for UL number E316865.

For more information, call Eco-Story collect at (207) 699-5727 or visit www.eco-story.com.

Since real estate development has a long food chain, we need to look up the chain from construction to see the future, that’s architects and engineers for contractors. According to AIA, the index of spending on architecture services, a leading indicator of nonresidential construction activity reached its best level since November 2007 last month, suggesting a U.S. building recovery is gaining traction.
The December architecture billings index rose more than 2 points last month to 54.2, from 52.0, reflecting increasing demand for design services, according to the American Institute of Architects. The billings index is considered an indicator of construction activity nine to 12 months in the future, and is widely tracked by companies that generate sales from the construction sector
A separate index of new project inquiries was up 1.2 points to 62.6, on a scale where any number above 50 indicates rising demand.
“This is more promising news that the design and construction industry is continuing to move toward a recovery,” said AIA Chief Economist Kermit Baker. That’s the good news, for a change.
However, there are stiff headwinds ahead. ABC’s latest Construction Backlog Indicator is sliding backwards. At the same time, construction unemployment remains at twice the national average unemployment rate. With all sectors of unemployment still high, consumer spending is still a concern. Local developers in the Puget Sound area seem to be focused mainly on multi-family construction and rehabbing distressed properties, if they can make the rehab pencil. While contractors first jumped into public works, public owners are also now broke, so even that work is slowing or slowed, and TARP and stimulus funds are winding down.
So, the economic outlook is murky and messages are mixed. Contractors are still scrambling for work, looking at new sectors where they are unfamiliar with the work, bidding further from home and figuring in lower margins. They are working long hours with little reward. Competition is fierce for what little work there is. I see real recession fatigue, physically and mentally. But contractors are a resilient and resourceful bunch. We’ll just keep plugging away until the indicators tip in our favor.

About 25,000 Xantrex grid tie solar inverters are being recalled by Schneider Electric because of a safety issue. The parts were made in China by Xantrex Technology, which is a subsidiary of Livermore, Calif.-based Schneider.

The problem lies with a component within the inverter that can degrade, causing out-gassing within the wiring compartment. Gasses can build from arcing and blow the compartment cover off with enough force to injury a bystander. Schneider has received five reports of blown covers, but there were no injuries or property damage in those cases.

The part converts photovoltaic voltages into utility grid voltages, allowing the owner to feed power into the electrical grid. The recalled units were made between September 2005 and August 2010 cost between $2,500 and $4,000. They were sold from September 2005 through January 2011 under the Xantrex, Sunpower and General Electric brands in the U.S. and Canada.

If you have one of these inverters, you should contact your authorized dealer to get it fixed; or call Xantrex Technology at (800) 714-7176 between 8:30 a.m. and 5 p.m., Monday through Friday.

Affected part numbers, printed on the top of the unit, include the following:

A policy change that limits the number of certain consultative visits by L&I’s Division of Occupational Safety and Health (DOSH) could affect contractors with multiple jobsites.

There are four types of onsite visits by safety consultants from DOSH – initial, training and assistance, follow-ups and non hazard assessment. According to L&I, the policy change only pertains to initial visits. Initial visits require a hazard assessment, opening conference, evaluation of all aspects of the safety and health management system relating to the scope of the visit, a walkthrough of the workplace, and a closing conference.

Under the new policy, DOSH consultants may self assign only one safety and one industrial hygiene visit at an employer’s worksite during a 12-month period. There may be justifiable reasons to provide more than one visit/site/discipline/year but these exceptions must be approved by the Regional DOSH Consultation Manager.

The policy affects contractors that have more jobsites for which an initial visit would be requested. Under the new rules, they would be allowed only one initial visit per calendar year (unless the exception is granted).

According to L&I, the change was required by federal OSHA. From an L&I memo: “The rationale for the change was to better balance the allocation of services with limited resources. The goal has been and still is to help the employer such that they can manage the safety of their worksites. The highest priority for DOSH Consultative Services remains small, high hazard employers and has not been changed or affected. Most small and medium size employers will not experience a change in the number of DOSH services provided. The larger employer is more likely to be impacted by this change to initial visits. Again, policies on all other types of visits are unaffected.”

AGC is monitoring the policy change to see whether and how it might impact the construction industry. Contractors are invited to chime in here if they have felt any impacts.

I would like to launch into a series of topics for discussion starting with foundations and working through each phase of a project to completion, but first to launch this endeavour I would like to do something to honor the current weather conditions and how it affects us. This is a sample of the topics to come, please feel free to submit any topic suggestions that you would like discussed during this series.

Attic ventilation and insulation is something most people never have much cause to think about, for single family and multifamily structures already completed there are ways to check if your attic is functioning properly, for new construction the same checks apply. Why is this important? 1. Heating & cooling loss = $$ out of your pocket 2. Damage can occur from ice damming and condensation 3.dry rot from insufficient venting. So what causes these issues? the concept of the conventional roof system is to insulate the ceiling (currently R-38 for attics is code) and vent the space above. Keeping the temperature of the attic close to the same temperature as the outside is very important.If the outside air is colder than the attic then cold air enters the attic through the improperly vented roof system it hits the warmer air and freezes any moisture in the warmer air. The other thing that happens is any metal (roofing nails, cast iron vent pipes etc.) that penetrate the roof into the attic do what is called thermal bridging, you may have seen something like this on aluminum windows where condensation freezes on the inside of the frames then melts creating a mess, roofing nails through the roof will rust and eventually allow water to leak in.

What’s the solution? first check to see what the depth of your insulation is, bat and blown in insulation is typically R-3.75 per inch so an 8″bat or blown in depth = R-30 which is pretty good! Next check to see all ventilation is in place and clear (sometimes the insulation blocks off the eve vents) next make sure there is an airflow pathway such as eves to gable end or ridge vents and that they are sized properly for the space (venting charts are available), this will keep our attics cold and living space warm in the winter with proper insulation. During the summer it works in reverse, hot air is ventilated out of the attic limiting the heat gain into our homes through our roofs while eliminating dry dry rot issues. In extreme cases the damage caused requires full roof replacement, climates definately play into the “extremes” however the solutions are the same, check with a local design professional or building inspector to see what is recommended for you region.

Consumer advocacy group America’s Watchdog says it is ramping up for what could be the largest defective plumbing recall in U.S. history. The product in question is a brass fitting inserted into cross-linked polyethylene tubing.

“We think there are literally 100,000s of U.S. homes that have a specific defective plumbing product called Uponor, or RTI P Pex, or MB Pex fittings, and according to court papers these will fail,” the group said in a press release. “We’d call this your basic homeowner nightmare — because we think the fittings will continue to fail, and fail, and fail — unless they are all replaced.

“Plumbers, who have recently repaired an Uponor, or its wholly-owned subsidiary Radiant Technology’s P Pex, or MB Pex brass plumbing fitting, should contact their clients, and ask them to contact us immediately.”

America’s Watchdog says the fittings are advertised and warranted for as long as 25 years, but some have failed months after installation. Failed fittings can cause water damage to walls, floors and personal property. The fittings allegedly fail when they are exposed to water because of a chemical reaction known as dezincification, which results in reduced water flow and leaks.

The fittings are identified by a “P Pex” or “MB Pex” stamped on their side.

The investigation by America’s Watchdog involves homes and buildings constructed nationwide from 2004 to 2007. For more information, contact the group’s Construction Defect Center.

After years of urging state leaders to address the state’s burdensome workers’ comp and unemployment systems, the construction industry received some welcome positive news from Olympia this week.

Gov. Gregoire announced policy changes that, if enacted, would reduce the 2011 increase in unemployment insurance taxes and help stem the growth of future workers’ comp rates.

First, workers’ comp: The business community has long maintained that the rules under which the system operates drive costs – and the rates employers pay – eternally upward. Two statistics bear this out: The average amount of time that a Washington State worker is out and receiving benefits is three times the national average, and the number of lifetime pensions has tripled in the last few years.

This week Governor Gregoire used the word that the construction industry has been promoting for some time: “Reform.”

The Governor said she plans to reduce lifetime pensions by offering lump-sum benefits to older workers unlikely to reenter the workforce and adjusting pensions of totally disabled workers who earn income through limited work.

Governor Gregoire also said she will introduce legislation to create a network of credentialed health care providers for state and self-insured employers. Other proposed changes included incentivizing employers to keep injured workers on the job by subsidizing wages in exchange for offering employees light-duty work, and expanding Centers of Occupational Health and Education, which encourage health care providers to adopt best practices and return workers to their jobs.

By no means does this package of reforms include all the changes that are necessary. For example, we still need to recalculate how timeloss benefits are awarded to prevent the all-too-often scenarios of workers receiving more in benefits than they did by working, and the pension reform should go farther. On the other hand, many of the Governor’s reforms seem supportable as good first steps (caveat: Specific legislation has not yet been introduced).

More to the point, after years of pushing by the business community, the door appears to be open for real discussion of workers’ comp reform with tangible benefits for business.

Unemployment insurance: The Governor’s unemployment insurance changes are more straightforward but no less welcome, as rates are set to rise by an average of 36 percent in 2011.

Using reserves in the insurance system’s healthy trust fund, the Governor would reduce and cap the shared-cost portion of unemployment taxes in 2011, reducing businesses’ unemployment taxes by $300 million. That’s a prudent move in today’s economy. The Governor also suggests permanently expanding training benefits in order to qualify for one-time federal dollars to modernize the UI system. That’s something that should be analyzed closely to determine its long term cost/benefit effect.

Public nonresidential construction spending now makes up nearly 55 percent of total nonresidential construction spending, according to Associated Builders and Contractors Chief Economist Anirban Basu.

Those numbers are about to swing to the benefit of private nonresidential construction.

“The expectation is that at some point in 2011, this set of circumstances will begin to shift as the broader economic recovery takes hold and federal stimulus-financed activities wind down toward a close,” Basu said in a press release. “The U.S. economy is expected to expand 3 percent or more this year, which should elevate the fortunes of a number of privately financed construction segments, though certain overbuilt segments such as hotel and office may take considerably longer to begin to recover.”

Basu’s comments came on the heels of a Jan. 3 report by the U.S. Census Bureau that showed private nonresidential construction spending fell 0.1 percent in November while spending was up on federal and residential projects. Compared to the same time in 2009, private nonresidential construction spending was down 16.5 percent. In contrast, total nonresidential construction was up 0.3 percent for the month, but down 6.8 percent from November 2009.

Six of the 16 construction subsectors showed decreases last November. Some of them included: communication down 3.4 percent; manufacturing down 2.6 percent; lodging down 1.5 percent. Some of the 10 sectors with increases included: conservation and development up 6.1 percent; water supply up 3.9 percent; higher and religious construction up 3.3 percent.

Some of the subsectors with decreases from the same time last year included: lodging down 48.4 percent; manufacturing construction down 34.7 percent; office construction down 18.9 percent. Some with spending increases included: conservation and development up 35.7 percent; amusement and recreation up 11.1 percent; sewage disposal up 8.3 percent.